April 2024 Labour Market Report: Engineering Continues to outperform most sectors

Explore the most recent developments in the UK labour market through the KPMG and REC UK Report on Jobs, featuring exclusive insights from leading recruitment consultancies including Redline Group. This detailed report leverages original survey data to offer a monthly overview of labour market dynamics. Here are the key highlights from March's findings.

Key Findings from the March Report:

• Quarterly business confidence in the UK economy has improved.
• Drop in demand for permanent vacancies, except for Engineering.
• Starting salaries are experiencing slower increases, the lowest in over three years

Staff Appointments and Billings:

Permanent staff appointments in the UK continued to fall in March. There were reductions in the number of permanent placements across all four monitored English regions in the latest survey period. Panellist noted a drop in the number of available positions, amid recruitment freezes at companies due to uncertain economic outlook. That said there were several reports from recruiters of shortages in the number of suitable candidates to fill positions, especially in the engineering and technical sectors.

Contract/temporary billings contracted, the fifth successive month amid evidence of budget restrictions.

Speaking about this, Jon Holt, Chief Executive and Senior Partner of KPMG in the UK said: “Persistent economic uncertainty has led many business leaders delaying major investment decisions and relying on saving for growth during the first quarter of the year. But they are optimistic about the outlook. There are still headwinds, but it’s time for the UK economy to get its groove back – and UK businesses will be ready when the Bank of England makes its interest rate cuts.”

At 908,000, the number of job opportunities slipped 43,000 from the three months to November 2023, having now fallen in the quarter for 20 successive periods, some 30% lower than the peak of 1,302,000 recorded in the three months to May 2022. However, it remains 100,000 above pre-coronavirus levels. The engineering sector, however, continues to flourish.

High-tech Industry Continues to Show Resilience and Robust Growth:

Lower demand for permanent workers was noted in eight of the ten broad employment categories during March. However, Engineering saw the highest increase in permanent staff demand and the second-highest rise in contractor demand. Skills shortages were noted for various specialist areas, including Electronic/Electrical, Mechanical, Design Engineering, Systems Engineers, Software Development, and Technical Support, along with AI Developers and Cyber Specialists.

This trend underscores the robust growth and resilience of the high-tech industry, amid escalating digitisation and the importance of sturdy IT infrastructure and technical innovations in the post-pandemic business and industry landscape. According to Lightcast data, the computing industry witnessed a 12% increase in job posting across the UK from December 2023 to February 2024.

Neil Carberry, REC Chief Executive, summed up the discussion by saying: “Economic growth has been sidelined for too long and must be at the heat of this year’s General Election campaign. Today’s data shows the economy in a holding pattern waiting for inflation and interest rates to ease, so that firms can get to investing. The decline in permanent placements has been steady for some months now, with temporary recruitment still robust, if falling back from the record highs of 2022/23.”

Getting the labour market right matters to driving sustainable growth. That’s why the REC has called for a new approach to the workforce from Government, based on strong evidence. Tackling barriers on skills, support infrastructure like childcare and transport, regulation and tax. It is time for politicians to really listen to business on what works to tackle inactivity and drive growth. Put the economy first, so it can support lower taxes and better public service funding.

Commenting on the April REC report, Martin Crapper, Redline’s MD said,

“Whilst there is still evidence of some uncertainty in the wider economic landscape, the engineering and technology sectors remain robust, with enquiries significantly increasing since the start of 2024. This emphasises the importance of a new approach to skills from government across the UK, led by the development and reform to the Apprenticeship Levy. Labour market constraints will still affect the electronics, engineering and technology sectors with a considerable number of highly skilled migrant workers needed in 2024.”  

Redline changes lives every day, building world-class teams for technology companies. We continue to be one of the UK’s most trusted Electronics and High-Technology recruitment specialists for professional Contract, Permanent and Executive positions. With four decades of experience in knowledge-led recruitment, we are perfectly positioned to offer advice about future-proofing your talent needs in the technology sector.

For more information about this month's report, contact David Collins on DCollins@RedlineGroup.com or call him at 01582 878804.